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Singapore Budget 2018: Status quo on foreign manpower rules a let-down for businesses
COMPANIES grappling with the tech talent shortage were disappointed that Budget 2018 did not contain measures to ease Singapore's tight foreign manpower rules.
Foreign manpower issues were noticeably absent from Finance Minister Heng Swee Keat's Budget speech on Monday, despite hopes that the government might let up on curbs as part of the wider push to help companies go digital and adopt new technologies.
In the run-up to Budget 2018, segments of the business community were calling for more flexible foreign manpower policies - specifically with the aim of bringing in highly-skilled tech talent to fill roles in data analytics, artificial intelligence and cybersecurity.
Mr Heng announced that foreign worker levy hikes for the marine and process industries would be deferred, and also made a provision to support the transfer of skills from foreign specialists to Singaporeans.
But he made no mention of easing up on tight foreign labour policies in key growth sectors.
"We had hoped for some tweaks to be made to our foreign manpower policy, not just for the marine and process industries," said Singapore Business Federation chief executive Ho Meng Kit.
"Although businesses have accepted and adapted to slow labour growth, concerns continue to grow about the shortage of highly skilled talent as companies intensify their transformation."
Mr Ho noted that the labour market is getting tighter as economic growth gains pace.
To tap growth opportunities here and across the region, companies are looking for talent in "critical and fast-growing sectors such as cybersecurity, data analytics, healthcare and technology".
"In these sectors where Singapore's future competitive advantage will lie, we believe there is room for some flexibility in foreign manpower policy," he added.
A 2016 survey by the Infocomm Media Development Authority (IMDA) found demand for infocomm professionals is expected to rise by more than 42,000 from 2017 to 2019.
Technical IT specialists - in areas such as data analytics and cybersecurity - were most in demand, with jobs expected to grow by about 33,400 over the period.
Companies said Singapore's tech manpower shortage is holding back their growth plans. Many opt to outsource their tech operations, or hire teams overseas while maintaining their headquarters in Singapore.
Marcus Tan, chief executive of cybersecurity solutions firm Cloak Apps, said the company finds it tough to hire good developers especially in emerging fields like machine learning and cybersecurity.
"We are trying to hire more Singaporeans but it's not easy," he added.
He estimates that local universities produce "about 10 or 20 really good developers every year" and most end up working in banks or big tech companies like Google.
In addition, "a lot of them have other aspirations - for example, they want to do a PhD or eventually work abroad."
Hiring more tech talent would allow Cloak Apps to take on more projects, Mr Tan said. The company has a team of five and also outsources some work to former staff as well as developers based abroad.
Demand for offshore tech talent among Singapore companies has grown exponentially, said Ivan Chang, the chief executive of Wonderlabs, a tech talent solutions firm that helps clients build and manage offshore software development teams.
"When we started in 2015, for every single qualified, English-proficient talent we managed to headhunt, we had maybe three or four clients ready to make a hire. Today, that number is 25," said Mr Chang.
The firm manages over 125 software engineers across four locations in Indonesia. Its clients range from startups to large enterprises.
"When we started we attributed offshoring to cost saving. But today, we realise it is about much more than cost. Companies need talent to grow, to operate and to constantly update their technologies and software," noted Mr Chang.
He added that the tech talent shortage is preventing companies - especially small and medium-sized enterprises (SMEs) - from developing sophisticated, customised solutions that meet their own requirements and workflows.
"I feel that the Budget failed to provide realistic subsidies for companies to retrain workers in tech skills, which are always evolving. It also failed to provide platforms for companies to access overseas talent.
"The implication of this is that businesses are not going to be able to compete."
Maybank Kim Eng economist Chua Hak Bin said policymakers might be concerned that any relaxation in foreign manpower rules will discourage firms from investing in labour productivity improvements.
Still, "the government might have to address the manpower crunch at some point, possibly even before the next Budget", Dr Chua noted.
"Capitalising on the current growth opportunities, which in turn will shore up fiscal revenue, will require a more flexible and calibrated approach," he added.
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For more Budget 2018 stories visit bt.sg/budget18